4 1 ihc global halal market

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Copyright HDC 2010

THE GLOBAL HALAL MARKETAn Insight into the Halal Opportunitiesand Halal Malaysia Certification

22nd March 2011


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Diverse Sectors In The HalalIndustry

Halal Product and

Services

Food

Ingredient& Additives

Cosmetics

Animal

Feed

Drugs andvaccines

Islamic

finance

Pharmaceuticals

Logistics

Halal is a

VALUE

PROPOSITIONthat exist within

key elements of

the supply chainof the intersecting

industry sectors


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Why go Halal?Germany has about 3.5 million of Western Europe's 20 million Muslims

According to the European halal control and certification authority in

Ruesselsheim , about 400 companies in Germany offer halal products

There are 1.4 billion muslims worldwide.Muslims are expected to account for 30% of the worlds population by 2025

Global halal trade is estimated to be $80 Billion or some 12% of total trade in agri-

food products.

Halal certified products are viewed by Muslims as a mark of quality and an addedreligious safeguard.

Halal products can be consumed by muslims and non-muslims


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Halal as a Value PropositionPrimary Industries Halal Products andServices

Halal

Compliance

Focus should not be on developing Halal industry, but on developing consumergoods industry with Halal as one of the Value Proposition

Food

Healthcare Logistic Services

Cosmetics

Food

Healthcare Logistic Services

Cosmetics


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Global Consumer ConcernsCHANGED CONSUMER MINDSET

Better educated and informed

Concerns moving from physical product

attributes to spiritual, social, environmental

and sustainability issues

Media & NGOs more vocal and active

Reputational risk a huge concern for brand

integrity

Traceability becoming critical

Where are you in the supply chain and

would your customers be happy with your

performanceSource : Courtesy of INTERTEK


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Agri-food supply chain Integrated

Grower/

Farmer

Primary

production

Processor/

Manufacturer/

Packer

Distributor/

Retailers/Consumer

ToFork

FromFarm

GlobalGAP,

Organic, Halal,Non-GMO

BRC-Packaging

Halal, GMP/ HACCP

BRC-Standards

GMP, HACCP HalalTGI, WCA, GSV

one brand

Certification

(Halal)

one brand

certification

Supply chain

inspections

QMS: ISO 9001, 14001, 22000, OHAS 18001, SA 8000, HACCP,TGI, WCA, GSV

Standards: Organic, Global Gap, non-GMO, etc.

Laboratory Analysis and Traceability

Training, Technical advisory and Capacity Building to International Standards

ToFork

F

romFarm

Source : Courtesy of INTERTEK


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Halal alone is not enough?

Pollution

Waste

Hazardous Material & Waste

Management

Using the wrong Energy & Global

warming



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Knowing your supply chain?Dont associate your products with this?

8Source : Courtesy of INTERTEK


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TIDY UP YOUR SUPPLY CHAINAssociate your products with being Halal and more..



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Malaysia has the Components of aComplete Halal Ecosystem

Source : MDS Logistics

DISTRIBUTIONPROCESSING PLANTSSUPPLIERS CUSTOMERS

SECURITY

SERVICESPACKAGING MATERIALS

EXPORTERS

TRADING

IMPORTERS HALAL ANIMAL FEED

COLD ROOM

MAINTENANCE

ISLAMIC BANKING, FINANCE &

INSURANCE

GOVERNMENT MINISTRYAND AGENCIES

CONTAINER CLEANING

ENTREPRENEUR

DEVELOPMENTOIC

R&D FIRMSFOOD & NUTRITION

PHARMACEUTICALS

COSMETICS

HALAL KNOWLEDGE CENTRE

COMPETENCY BASED TRAINING

INNOVATIVE & COMMERSIALISATION

PHARMACEUTICALS & COSMETICS

AGRICULTURE & ANIMAL HUSBANY

ISLAMIC FINANCE

FOOD & NUTRITION

CERTIFICATION &

QUALITY ASSURANCE

JAKIM

MINISTRY OF HEALTH

MARDI

DSM

MOA


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Global Market for Halal Products

22%

6%

10%

62%

Sales

Food

&

Beverages**

Nutraceutical

Pharmaceutical

FMCG sector

Global market for Halal-potential products, 2005**

The Halal market hasbeen quantified as the

target market that can

potentially be captured

Approximately 67% ofthese Halal-potential

products are

categorized as fast

moving consumer

goods (FMCG)

FMCGs in theprimary meat andfood sectors account

for 62% of the market

Does not include Islamic Financial Services. Services involved in final product e.g. certification, logistics, R&D are

included in sectoral values

** Based on sales revenue

*** Halal processed food is taken as 66% of the total based on world Halal meat consumption

**** Only non-alcoholic beverages

Source: Euromonitor reports; FAOSTAT

100% = USD 2.1 Trillion

Cosmetic

&

Personal Care


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Global Halal Market Value


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ASEAN: Future World Halal Base

Many ASEAN countries have low percapita trade-able food consumption.Indication: High potential in futuredemand.

Currently, chicken meat intake per-capita in Indonesia is 4 kg/year.Forecast in 7-8 years, increase inintake per-capita to 8 kg/year,demand increases for chicken meat to1.3 million MT.

With the increase in economy, rise indisposable income and increasingawareness on Halal; Halal products tobe traded particularly meat and meat-products will increase exponentially.

ASEAN POTENTAIL


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SPECIALTY

PROCESSED

FOOD


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Examples of Opportunities inProcessed FoodProducts Consumption of Halal Processed Food in Key Import Locations

(US$ Mil)

SINGAPORE SAUDI ARABIA FRANCENETHERLAND

S

Confectionary 137 658 4,590 1,434

Ready Meals 198 8 3,201 603

Canned Preserved Food 63 311 2,500 396

Chilled Processed Food 48 - 1,122 1,337

Sauces Dressing andCondiments

54 347 473 559

Total 500 1,324 11,886 4,329

Source: Euromonitor , USDA reports, 2007

10 % of these market space would constitute US$ 1.8 billion in potential revenue for the HalalIndustry player who chooses to capitalise on it


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Potential Of Halal Processed Food Products

Based on 6 countries from EU, Asean and GCC

Canned/ preserved food13%

Chilled processedfood22%

Confectionary30%

Frozen processed

food9%

Ready meals14%

Sauces, condiments,dressing

12%

Potential of Sales of Processed Food (2010)

Source: Eurostat, Euromonitor, Data Monitor, Industry sources & GFRA Analysis (2008)


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HALALINGREDIENTS


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Global Market for Ingredients byCountry, 2005Total Market Value US$ 30.4 billion

Source : Euro Monitor and RTS Resources, 2005

Top 10 growth segments for food ingredients, 2005 to 2010

Rest of the World

43%

France

4%

USA

29%

China

10%

Germany

7% Japan

7%

100%= USD 30.4 bil


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Halal IngredientsA significant portion of the value-add (up to 75%) of FMCG is in ingredients.

Potentially halal products become non-halal through the use of non-halal

ingredients

Global market for ingredients was USD30.3b in 2005, and is expected to rise

to USD34.2b in 2010.

Specialty ingredient industry dominated by MNCs for example Danisco, Kerry

Ingredients, and Barry Callebaut.

Consumer goods ingredients4 categories

Core Commodities Functional ingredients, e.g. Food additives Active ingredients, e.g.

Flour Foaming agents Colouring Anti-bacteria agents

Cocoa Anti- caking agents Flavorings Anti- aging agents

Hydrogenated vegetable

fats

Binding agents Fragrances Cholesterol reducing agents

Preservatives

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4

5


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Opportunities for Palm OilPotential

ingredients from

palm oil

Potential use Status of commercialization

Functional

Lycopene

Beta Carotene

Tocotrienols

Nutriceuticals, fortified

food and beverage,

cosmetics

Commercialised by local

companies but with limited

scale and export quality

Enzymes

Lipase

Coenzymes Q10

Cheeses

Cosmetics

Not yet commercialised

Not yet commercialised

Chemicals

Glycerin

Di & Mono

Glycerides

Sodium Laureth

Sulphate

Soap, lotions and cream

Emulsifier

Bath shower and shampoos

Mainly available in countries

with access to vegetable

oils. In markets such as

Australia, UK, chemicals

are generally of animal

origin

Texturizer Animal fat

replacer

Sausages and burgers Commercialised by a localcompany and used in all

their chicken based

products

There is potential to link to the palm oil plantations sector in Malaysia, and tap on R&D that has

already been performed by institutes such as MPOB. This will increase the capacity for local

companies (such as Flavour Inn Corporation and Green House Ingredients) to innovate and fostercollaborations with MNC consumer goods companies


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ANIMALHUSBANDRY


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Animal HusbandryFor beef, global exports are dominated by Brazil, Australia and

Argentina, accounting for 65% of the market in 2005

Global poultry export is dominated by Brazil, U.S.A. and the

Netherlands, accounting for 70% of the market in 2005

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Potential Of Halal Meat Based Products

Based on 6 countries from EU, Asean and GCC

Canned/ preservedmeat & meat

products4%

Chilled processed

meats

80%

Frozen processed

poultry

6%

Frozen processed

red meat

7%

Frozen pizza (meat

based)

3%

Potential of Sales of Meat-Based Products (2010

Source: Eurostat, Euromonitor, Data Monitor, Industry sources & GFRA Analysis (2008)


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Global Halal Market Opportunities

New Clusters Potential Values for Halal Market

(Based on 5% of Global Trade)

Cosmetic/Personal Care USD$ 177 Billion

Agriculture USD$ 41.5 Billion

Pharmaceutical USD$ 30.3 Billion

Islamic Finance USD$ 25.0 Billion

Logistic USD$ 0.17 Billion

Travel Industry USD$ 0.13 Billion

Total Values for Halal New

Growth ClustersUSD$ 274 .1 Billion

Potential Growth Clusters


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There is a Captive Muslim Marketin GermanyWorld Muslim Population (Millions) European Muslim Population (Millions)

Muslim constitute 20% of the world population

Source : Global Mapping International Source : www.islamicpopulation.com


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Target Markets for Halal ProducersWHERE IS MUSLIM PURCHASING POWER? WHERE ARE MUSLIM CONSUMERS?

Source : Addressing the Muslim Market, A.T Kearney

Largest MuslimPopulation

Largest Muslim % ofTotal Population

Highest Purchasing PowerOf Muslim Population

Indonesia Bahrain Saudi Arabia

Pakistan Kuwait Turkey

India Saudi Arabia Iran

Bangladesh Algeria Malaysia

Turkey Iran Qatar

Egypt Oman Russia

Iran Turkey France

Nigeria Yemen Libya

China Tunisia UAE

Ethiopia Iraq United States

Algeria Libya Algeria

Morocco Pakistan Singapore

Sudan UAE Indonesia

Afghanistan Qatar Egypt

Iraq Egypt The Netherlands

Average growth of Muslim Population:1.8% p.a

Worldwide Muslim population : 1.56

billion

Asia (870 million)Middle East (190

million)

Africa (443 million)

Europe (51 million)

Northern Europe (2 million)

Western Europe (10 million)

Southern Europe (9 million)

Eastern Europe (29 million)

North America (7 million)

South America (3 million)


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HALALCERTIFICATIONINMALAYSIA


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Halal Certification in Malaysia

Application /

Document Approval

Premise Inspection /

Audit / Lab

Panel / Appeal

Committee

Issuance of Halal

Certificate

Monitoring &

Enforcement


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What does this mean for HalalSuppliers?Need to demonstrate your business credentials

Move from thinking

To being Halal Certified

To act Green

To act Socially Responsible

To ensure facility Security is in place

To ensure Product Safety is in place

Supply chain traceability is requiredFarm to Fork

Raw material to final product



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Halal Industry Development Corporation (HDC)5.02, Level 5,

KPMG Tower, First Avenue, Persiaran Bandar

Utama,

47800 Petaling Jaya, Selangor Darul Ehsan,

Malaysia.

Tel : +603 - 7965 5555

Fax : +603 - 7965 5500

Hotline : 1800 - 880 - 555 (within Malaysia)+603 7965 5400 (outside Malaysia)

4 1 ihc global halal market

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